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INCOME TAXES | 12 Months Ended
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Feb. 02, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The domestic and foreign components of income (loss) before income taxes were as follows:
(In millions) | 2024 |  | 2023 |  | 2022
Domestic | $ | 61.6 |  |  | $ | 90.9 |  |  | $ | (404.9) |
Foreign | 644.1 |  |  | 750.1 |  |  | 793.1 |
Total | $ | 705.7 |  |  | $ | 841.0 |  |  | $ | 388.2 |
The income before income taxes in 2022 includes a $417.1 million noncash goodwill impairment recorded in conjunction with the Company’s annual goodwill impairment testing. Taxes paid were $165.6 million, $209.8 million and $254.5 million in 2024, 2023 and 2022, respectively. The provision (benefit) for income taxes attributable to income consisted of the following:
(In millions) | 2024 |  | 2023 |  | 2022 |
Federal: |  |  |  |  |  |
Current | $ | (0.2) |  |  | $ | 0.1 |  |  | $ | (6.9) |  |
Deferred | (24.3) |  |  | (18.2) |  |  | (5.1) |  |
State and local: |  |  |  |  |  |
Current | 5.4 |  |  | 5.3 |  |  | (6.2) |  |
Deferred | 0.1 |  |  | 0.2 |  |  | 0.8 |  |
Foreign: |  |  |  |  |  |
Current | 127.6 |  |  | 186.4 |  |  | 191.1 |  |
Deferred | (1.4) |  |  | 3.6 |  |  | 14.1 |  |
Total | $ | 107.2 |  |  | $ | 177.4 |  |  | $ | 187.8 |  |
The provision (benefit) for income taxes for the years 2024, 2023 and 2022 was different from the amount computed by applying the statutory United States federal income tax rate to the underlying income as follows:
| 2024 |  | 2023 |  | 2022 |
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | % |
State and local income taxes, net of federal income tax benefit | 0.7 | % |  | 0.8 | % |  | 1.1 | % |
Effects of international jurisdictions, including foreign tax credits | 3.0 | % |  | 1.9 | % |  | 1.6 | % |
Change in estimates for uncertain tax positions | (7.6) | % | (1) | (1.6) | % |  | (2.2) | % |
Change in valuation allowance | (1.8) | % |  | 0.3 | % |  | 1.2 | % |
Tax on foreign earnings (GILTI and FDII) | (0.5) | % |  | (1.9) | % |  | 1.2 | % |
Goodwill impairment | — | % |  | — | % |  | 22.3 | % |
Excess tax (benefit) expense related to stock-based compensation | (0.1) | % |  | 0.1 | % |  | 0.5 | % |
Other, net | 0.5 | % |  | 0.5 | % |  | 1.7 | % |
Effective income tax rate | 15.2 | % |  | 21.1 | % |  | 48.4 | % |
(1) Includes a benefit of 4.7% from the settlement of a multi-year audit in an international jurisdiction. The Company’s tax rate is influenced by several factors, including the mix of international and domestic pre-tax earnings, specific discrete transactions and events, new regulations, audits by tax authorities, and new information received. These elements may lead to adjustments in both the Company’s estimates for uncertain tax positions and the overall effective tax rate. The Organization for Economic Cooperation and Development released the Pillar Two framework which includes transition and safe harbor guidelines around the implementation of a global minimum effective tax rate of 15%. Pillar Two legislation was enacted in certain jurisdictions where the Company operates and was effective in 2024. The global minimum effective tax rate did not have a material impact on the 2024 effective tax rate. The components of deferred income tax assets and liabilities were as follows:
(In millions) | 2024 |  | 2023 |
Gross deferred tax assets |  |  |  |
Tax loss and credit carryforwards | $ | 170.5 |  |  | $ | 152.0 |  |
Operating lease liabilities | 331.4 |  |  | 352.4 |  |
Employee compensation and benefits | 52.7 |  |  | 60.2 |  |
Inventories | 44.6 |  |  | 41.5 |  |
Accounts receivable | 5.4 |  |  | 9.2 |  |
Accrued expenses | 11.7 |  |  | 12.6 |  |
Property, plant and equipment | 242.6 |  |  | 243.5 |  |
Other, net | 8.2 |  |  | 5.4 |  |
Subtotal | 867.1 |  |  | 876.8 |  |
Valuation allowances | (60.0) |  |  | (73.7) |  |
Total gross deferred tax assets, net of valuation allowances | $ | 807.1 |  |  | $ | 803.1 |  |
Gross deferred tax liabilities |  |  |  |
Intangibles | $ | (754.7) |  |  | $ | (772.2) |  |
Operating lease right-of-use assets | (304.8) |  |  | (322.1) |  |
Derivative financial instruments | (44.1) |  |  | (21.1) |  |
Total gross deferred tax liabilities | $ | (1,103.6) |  |  | $ | (1,115.4) |  |
Net deferred tax liability | $ | (296.5) |  |  | $ | (312.3) |  |
At the end of 2024, the Company had on a tax-effected basis approximately $188.7 million of net operating loss and tax credit carryforwards available to offset future taxable income in various jurisdictions. The carryforwards expire principally between 2025 and 2044. The Company’s intent is to reinvest indefinitely substantially all of its historical earnings in foreign subsidiaries outside of the United States in jurisdictions which it would expect to incur material tax costs upon the distribution of such amounts. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation. Uncertain tax positions activity for each of the last three years was as follows:
(In millions) | 2024 |  | 2023 |  | 2022
Balance at beginning of year | $ | 99.6 |  |  | $ | 114.7 |  |  | $ | 127.8 |
Increases related to prior year tax positions | 3.2 |  |  | 0.6 |  |  | 12.4 |
Decreases related to prior year tax positions | (35.4) |  |  | (11.0) |  |  | (12.3) |
Increases related to current year tax positions | 5.0 |  |  | 2.9 |  |  | 2.7 |
Lapses in statute of limitations | (12.0) |  |  | (6.4) |  |  | (12.0) |
Effects of foreign currency translation | (1.0) |  |  | (1.2) |  |  | (3.9) |
Balance at end of year | $ | 59.4 |  |  | $ | 99.6 |  |  | $ | 114.7 |
The entire amount of uncertain tax positions as of February 2, 2025, if recognized, would reduce the future effective tax rate under current accounting guidance. Interest and penalties related to uncertain tax positions are recorded in the Company’s income tax provision. Interest and penalties recognized in the Company’s Consolidated Statements of Operations for 2024, 2023 and 2022 totaled a benefit of $9.2 million, an expense of $1.3 million and an expense of $0.9 million, respectively. Interest and penalties accrued in the Company’s Consolidated Balance Sheets as of February 2, 2025 and February 4, 2024 totaled $11.7 million and $21.2 million, respectively. The Company recorded its liabilities for uncertain tax positions principally in accrued expenses and other liabilities in its Consolidated Balance Sheets. The Company files income tax returns in the United States, various state and local jurisdictions and in over 40 international jurisdictions each year. Most tax audit examinations by taxing authorities have been completed, or the statute of limitations has expired, for the Company’s United States federal, foreign, state and local income tax returns filed through 2015. It is reasonably possible that a reduction of uncertain tax positions of up to $15.0 million may occur within the next 12 months.

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